Half year results4 Nov 2010 18:40
http://www.invensys.com/media/default.asp?top_nav_id=3&nav_id=3&action=detail&content_no_id=884
Further progress in achieving sustainable growth particularly in emerging markets
Highlights
• Orders were £1,148 million (H1 09/10: £1,079 million), up 6%
(3% at CER 1)
•Order book was flat at CER at £2,232 million (FY 09/10: £2,307 million), providing good revenue cover for the second half and next year; emerging markets now represent 46% (FY 09/10: 40%)
• Revenue was up 9% (6% at CER) at £1,162 million (H1 09/10: £1,066 million), driven by order book conversion
• Operating profit 2 was £100 million (H1 09/10: £102 million), down 2% (3% at CER) with good underlying performances in each of our divisions offset by additional contract implementation costs at Invensys Rail
•Underlying earnings per share 3 were up 51% at 7.4p (H1 09/10: 4.9p), due to reductions in restructuring charges and IAS 19 finance charge
• Operating cash flow 2 was £83 million (H1 09/10: £92 million) and operating cash conversion was 83% (H1 09/10: 90%)
•Interim dividend increased by 50% to 1.5p per share (H1 09/10: 1.0p per share) in line with the intent to make progressive increases in payout
•Maintained strong financial position with net cash totalling £336 million, leaving us well positioned to invest further in our businesses
•Outlook for the year remains unchanged
Statement by Ulf Henriksson, Chief Executive
During the first half, we have successfully positioned Invensys to deliver sustainable growth through differentiated offerings, strategic partnerships and an emphasis upon emerging markets, which now represent nearly half our order book compared with 17% in March 2008.
Invensys Operations Management increased orders by 15% at CER as we continue to win large greenfield control and safety projects in emerging markets. Its order book is at record levels at £1.0 billion and its pipeline of current order prospects is around £4 billion. Revenue growth in the second half will increase as we convert recent large orders into revenue. We have also experienced a recovery in short-cycle equipment sales particularly in North America. Taken together these have contributed to a significant improvement in operating profit and another strong cash performance.
Invensys Rail has expanded further into new markets and we are encouraged by the prospects arising inside and outside China from our agreements with CSR Corporation Ltd (CSR). We have also been reassured by the recently announced commitment by the UK government to continued rail infrastructure investment for Network Rail, London Underground and Crossrail. Although we are incurring additional contract implementation costs for three mass transit contracts now amounting to £18 million which have affected first half results, Invensys Rail’s underlying performance and
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